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Sleep-In Payments
23rd June 2010
A recent case involving an employee who worked at a Residential Care Home has reinforced the findings of previous cases on payments by employers for 'sleep-ins'.
In the case of Smith v Oxford Learning Disability Trust the employee worked part time for 15 hours per week at the Residential Care Home. There was an occasional requirement to sleep-in overnight at the Home for 9.25 hours whilst undertaking on-call duty. In return, a flat rate payment of £25 was received by the employee.
After a short time, the employee queried this arrangement and argued that the Home was in breach of its obligation under the National Minimum Wage (NMW) Regulations 1999 by failing to pay the NMW over the whole period of employment, including the hours on duty at the sleep-in. The Home responded that the flat rate payment counted towards payment of the NMW and therefore the Home was complying with the regulations. Not satisfied with this response, the employee resigned and commenced Tribunal proceedings, claiming unfair constructive dismissal and unlawful deductions from wages.
Both parties had agreed that the employee’s contractual hours and any hours on ‘sleep- ins’ counted as ‘hours worked’ for this purpose but disagreed as to whether the sleep-in payment could count towards discharging the Home’s liability to pay the NMW. The employee claimed that this flat rate payment was ‘an allowance’ not attributable to his performance in carrying out the work and therefore it should not form part of the NMW calculation.
The Employment Tribunal rejected the employee’s claims on the grounds that the sleep-in payment did not constitute an allowance under Reg.2 (1) of the NMW Regulations and the employee appealed to the Employment Appeal Tribunal (EAT). The Tribunal accepted that, had the claim succeeded, it would have found that the Home had failed to pay the NMW in the last 3 months of the employee’s employment.
Decision of the Employment Appeal Tribunal
The Employment Appeal Tribunal, in a majority ruling, found that the flat rate payment could be included and taken into account by the Home towards its obligation to pay the NMW for hours on duty.
The EAT noted that Reg.2 (1) defined an allowance as ‘any payment paid by an employer to a worker attributable to a particular aspect of his working arrangements or to his working or personal circumstances that is not consolidated into his standard pay’.
Whilst conceding that the sleep-in payment was not consolidated in this case, it interpreted the definition as meaning that the payment had to be made for doing some element of work over and above, or distinct from the worker’s basic job.
Using this approach the EAT held that the sleep-in payment was not an allowance, on the basis it was a payment to the employee, in fact the only payment for performing the sleep-in duty. As such it was different from the other ‘unsocial hours enhancements’ to which he was separately entitled for the hours worked before and after the sleep-in. Each of these entitlements were paid on top of his basic pay and were considered ‘allowances’ under Reg.2 (1).
The employee’s appeal was consequently dismissed by the EAT and the Home’s flat rate payment was therefore allowed to be counted towards calculation of the NMW.
Conclusion
Although the sums of money involved in this case were small, the issue is one that applies to many other employers in the Care sector who have similar sleep-in arrangements.
These findings are also consistent with previous similar cases (Burrow Down Services v Rossiter, 2008) and with previous cases involving the Working Time Regulations where it was held that time spent ‘on call’ in the workplace constitutes working time or ‘hours of duty (Simap and Jaeger).
The period of time when a worker is required to be physically present on the employer’s premises must now be regarded in its entirety as ‘working time’ within the meaning of the Working Time Directive, regardless of the work actually done during the period.
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